trading limit


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Trading limit

The exchange-imposed maximum daliy price change that a futures contract or futures option contract can undergo.

Daily Trading Limit

The maximum amount of gain or loss that can occur on a particular security or, more commonly, derivative on a trading day. Derivatives, currencies, and commodities can be extremely volatile investments. In order to prevent this volatility from spiraling out of control, options and futures exchanges enact daily trading limits stating that a security cannot rise or fall more than a certain percent in a given trading day. If a security reaches the daily trading limit, trading on that security is suspended for the remainder of the day. This is called a locked market. See also: Limit up, Limit down.

Limit

1. The maximum amount of price change a futures contract is allowed to undergo on a given trading day. Limits are mandated by the exchanges on which futures contracts trade, and exist in order to reduce volatility in the market. It is also called a trading limit.

2. The maximum number of transactions in commodities that an individual may make on an exchange on a given trading day. Limits are mandated either by the Commodity Futures Trading Commission or by the exchanges on which commodity contracts trade. It is also called a trading limit.

3. See: Limit order.

trading limit

The number of commodity contracts that a person may trade during a single day. The limit is established by the Commodity Futures Trading Commission or by the exchange on which the particular contract is traded. Compare position limit.
References in periodicals archive ?
Citigate Commodities Trading Limited looks to increase and secure assets in West Africa's renowned diamond producing nations, Guinea, Liberia, and Sierra Leone.
Pakistan in mid-2008 imposed emergency trading limits to halt a slide in stocks that sent the benchmark index down 42 percent in 19 weeks.
operation and provides us with gas supplies in areas of strategic importance," said Vitaly Vasiliev, CEO of Gazprom Marketing & Trading Limited. "We are very pleased with the relationship we are developing with EDF Trading and look forward to additional business opportunities in the future."
Samer Arnous, Director of the Upturn Trading Limited, said on this occasion that he foresees India as a big market for solar projects.
Charoen acquired 50% stake in plastic sack producer PT Poly Packaging Industry from PT Prospek Karyatama and 49.99% stake in the same company from PT Noble Bright Trading Limited in a deal of Rp 11.71 billion signed on Dec.
"We find the LNG market a very attractive target," Brad Hitch, vice president of business development at Merrill Lynch Commodities (Europe) Trading Limited, told an LNG conference.
Highland will be owned by the Highland Consortium, which consists of Baugur Group (through its wholly-owned subsidiary BG Holding), FL Group, Don McCarthy, West Coast Capital (through its wholly-owned subsidiary TBH Trading Limited), Kevin Stanford, Bank of Scotland (through its wholly-owned subsidiary Uberior) and Stefan Cassar.
The acquisition of the stock of BEC Trading Limited by Tree of Life, Inc., a subsidiary of Tree of Life/Gourmet Award Foods Canada Inc., was completed March 21st.
The American company IBE Trans of New York has sold 71% of its stake in the Chimko chemicals plant in Bulgaria to the Cypriot operator AVST Trading Limited. The leading shareholder in AVST is the British consortium United Kingdom Gas and Energy Finance, according to a statement from IBE Trans, which acquired a 57% stake in the Chimko plant, producing fertilisers, in July 1999, in a deal worth a million Deutschemarks (Euro 511,000).
The market started off under some selling pressure due to news that some Singapore brokerages had imposed their own trading limits Tuesday in a nervous response to heavy trading volumes in Singapore in recent weeks.
and another 60,000 square feet to Bristar Trading Limited, Solar International Shipping Agency, and Legent Corporation.
The following information is applicable to all lots: ESPO has established a commercial trading company, ESPO Trading Limited, whose target clients are third sector organisations such as national and local charities, public sector mutual organisations and other organisations involved in the delivery of services to or for the public sector.